Assume a firm receives the following credit terms from six suppliers and a 365-day year. Supplier 1:

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Assume a firm receives the following credit terms from six suppliers and a 365-day year.

Supplier 1: 2/10 net 50

Supplier 2: 1/10 net 30

Supplier 3: 2/10 net 150

Supplier 4: 3/10 net 60

Supplier 5: 1/10 net 45

Supplier 6: 1/20 net 80

Determine the interest rate associated with not taking the cash discount and paying at the end of the credit period for each of the six suppliers’ credit terms.

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Introduction to Corporate Finance What Companies Do

ISBN: 978-1111222284

3rd edition

Authors: John Graham, Scott Smart

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Question Posted: Mar 26, 2015 06:58 AM

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Assume a firm receives the following credit terms from six suppliers and a 365-day year. Supplier 1:

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r d1 d 365CP DP Supplier 1 210 net 50 021 02 36550 10 186 Supp...View the full answer

Introduction to Corporate Finance What Companies Do

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